Emerson Electric Increases Sales but Misses Estimates on Earnings

Seth Jayson, The Motley Fool
Updated

Emerson Electric (NYS: EMR) reported earnings on May 1. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q2), Emerson Electric met expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue increased slightly and GAAP earnings per share increased.


Gross margins increased, operating margins shrank, and net margins shrank.

Revenue details
Emerson Electric reported revenue of $5.92 billion. The 17 analysts polled by S&P Capital IQ expected a top line of $6.01 billion on the same basis. GAAP reported sales were 1.1% higher than the prior-year quarter's $5.85 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.74. The 22 earnings estimates compiled by S&P Capital IQ averaged $0.80 per share. GAAP EPS of $0.74 for Q2 were 1.4% higher than the prior-year quarter's $0.73 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 39.5%, 10 basis points better than the prior-year quarter. Operating margin was 14.7%, 220 basis points worse than the prior-year quarter. Net margin was 9.2%, 30 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $6.69 billion. On the bottom line, the average EPS estimate is $1.05.

Next year's average estimate for revenue is $25.04 billion. The average EPS estimate is $3.50.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 1,358 members out of 1,385 rating the stock outperform, and 27 members rating it underperform. Among 339 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 332 give Emerson Electric a green thumbs-up, and seven give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Emerson Electric is outperform, with an average price target of $57.75.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Emerson Electric. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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